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Product Life Cycle

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Hindustan Unilever Limited (HUL) is India'slargest fast moving consumer goods company,with leadership in Home & Personal Care

Products and FoodsMission Adds vitality to life

Parent Company-Unilever with 52.10% equity

Its combined volumes of about 4 million tonnesand sales of Rs.13,718 crores.

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Time

ProductDevelop-

ment

Introduction

Profits

Sales

Growth Maturity Decline

Losses/Investments ($)

Sales andProfits ($)

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Advertising & Promotional expenditures are attheir highest ratio to sales- to rapidly increasecustomer awareness of the product and to

target the early adopters.

Higher costs coupled with a low sales volume

usually make the introduction stage a periodof negative profits.

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Decision has to be taken on being a pioneer ornot

Pioneer advantage. Brand Recall - brand synonymous with the

new category. Eg:-Dettol(=Antiseptic)

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Product- one or few products, relatively undifferentiated

Price High -Skim price strategy- High profit margins to

recoup development costs quicklyLow- Penetration Pricing strategy to gain market share

rapidly.

Distribution - Distribution is selective and scattered as thefirm commences implementation of the distribution plan.

Promotion - Promotion is aimed at building brandawareness

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Lifebuoy was sold in India as early as 1895

It was officially launched and marketed from

1935.

It was the largest selling soap brand in the

world with sales of Rs 5 bn and soldapproximately 2 million soaps a day (as on2002).

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Initial Positioning- in the Health and Valueplatform.

Initial Segmentation-Carbolic Soap

Its ads reiterated the message that Lifebuoywashed away germs and kept one protectedand healthy.

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Its target segment was Males-A Masculinebrand.

The soap was brick red and carbolic ingredientwith a unique smell (chryselic perfume)

This distinguished itself from other femininebrands.

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The campaigns showed footballer players and

athletes using the soap and the jingle followedjingle followed " thandurusti ki raksha

kartha hai lifebuoy, lifebuoy haijahan thandurusti hai vahan". -Malesoap in health care

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Product- undifferentiated red brick withcryselic smell

Segmentation:- Carbolic soap segment

Positioning:-Masculine brand in health andvalue platform

Market Strategy:-High Penetration

Initial Price & Market share- had a 21% marketshare in the overall soap market

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"It is the biggest and comprehensive relaunchof any of our brands. Lifebuoy which hasremained unchanged for the last 107 years is a

completely new product since January 2002,"said Mr Sanjay Dube, Category Head - MassMarket Soaps and Detergents, HLL.

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The growth stage is a period of rapid revenuegrowth.

Sales increase as more customers become aware of theproduct and its benefits and additional marketsegments are targeted.

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Product - New product features and packagingoptions; improvement of product quality.

Price - Maintained at a high level if demand ishigh, or reduced to capture additional customers.

Distribution - Distribution becomes more intensive.

Promotion - Increased advertising to build brandpreference.

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Intro:-

Launched in 1975, this brand is the first geltoothpaste aiming at the youth segment.

HLL through CloseUp have created and owned asegment for itself.

CloseUp was a disruptive brand that changed thestructure of toothpaste market in India.

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With the red colour and smart advertising , itforced the market leader to change its strategy

and launch a gel variant.

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The customer insight was that people areconscious about their breath and want to getclose with each other with confidence.

Based on this insight the brand was positionedon the Fresh Breath platform

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The campaign was executed showing "Happycouples having fun together".

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Even film Theatres had corners called

as "Close Up Corners".

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Close Up have used films and filmi songs toappeal to the Indian youth.

Close Up was the first brand to introduce the "Self Check" of breath.

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The famous " HA HA" was the idea of Close Upintroduced in year 1987

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Sales continue to increase at a slower pace.

Advertising expenditures will be reduced.

Competition may result in decreased market share and/or prices.

The competing products may be very similar at this point,increasing the difficulty of differentiating the product.

The firm places effort into encouraging :-

competitors' customers to switch, increasing usage per customer, and converting non-users into customers.

Sales promotions may be offered to encourage retailers to give theproduct more shelf space over competing products.

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Product - Modifications are made and features areadded in order to differentiate the product fromcompetitors.

Price - Possible price reductions in response to aprice war.

Distribution - New distribution channels to avoidlosing shelf space.

Promotion - Emphasis on building of brand loyalty.

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Close Up found that its mono-attribute focus islosing the sheen

Many market players

Crest-by P&G Colgate & Pepsodent wars

Cliden and Brand by Ajanta group

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Crest, by P&G- 135gm pack for Rs21-25

LG Care-Cliden toothpaste

Toothpaste by Ajanta-200gm pack for Rs20/-

Combipack of Anchor white toothpaste &toothbrush- Rs 25/-

Pepsodent & Close up-200gm pack-40Rs/-

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New focus on 3 attributes : Fresh breath, WhiteTeeth and Strong Teeth.

CloseUp With Vitamin and Flouride offer

oral care3 Variants- Oxy fresh, Eucalyptus Blue, Lemonvariant

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Smile Ad & Kya aap Close up karte hain-topromote brand loyalty & emphasize brandidentification in heightened competition.

The 'Smile King' commercial reflected theconfidence of today's youth.

Launch of www.closeupuniverse.com- Awebsite for youth, again reinforcing that it is ayouth brand.

http://www.closeupuniverse.com-/http://www.closeupuniverse.com-/

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Eventually sales begin to decline as the marketbecomes saturated, the product becomestechnologically obsolete, or customer tastes

change.

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Maintain the product in hopes that competitorswill exit. Reduce costs and find new uses forthe product.

Harvest it, reducing marketing support andcoasting along until no more profit can bemade.

Discontinue the product when no more profitcan be made or there is a successor product.

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Product - The number of products in the product linemay be reduced. Rejuvenate surviving products tomake them look new again.

Price - Prices may be lowered to liquidate inventory ofdiscontinued products. Prices may be maintained forcontinued products serving a niche market.

Distribution - Distribution becomes more selective.Channels that no longer are profitable are phased out.

Promotion - Expenditures are lower and aimed atreinforcing the brand image for continued products.

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However, most of the companies go forBRAND REVIVAL .

On a positive note, the whole new version ofthe product with new marketing strategy isused.

Thus, under the initial name, a completely newformulation is developed.

Hence, very few products may or may not bewiped off.

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The soap market in India was fairly sluggish in2001, declining by 9-10 per cent. Lifebuoy'sdecline exceeded that of the overall market

Lifebuoy has been declining by 15-20 per centin volume terms.

The decline was partly on account of thesluggish growth in the rural market, whichaccounts for 50 per cent of soap demand.

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HLL launched LifebuoyActive Lifebuoy ExtraStrong in during thesecond half of 2001.

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OLD LOOK NEW LOOK

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Lifebuoy is no longer a carbolic soap withcryselic perfume,

It is a toilet soap with a different `health'

fragrance. With this launch, the carbolicsegment has been wiped out.

New perfume, formulation, size and shape.

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From an earlier focus on men, the focus hasshifted to family with the message thatLifebuoy is for effective protection from germs

that cause health problems.

Focus on Men Focus on family

b h h d

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A marathiAdvertisement toattract local rural

consumers.

Distribution- It has touchednearly 100 million Indiansacross 44,000 villages

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HLL has identified 8-9 key States forcommencing its rural contact programmewherein the CONCEPT OF HYGIENE will be

highlighted.

O 15 O b 2008 Lif b

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On 15 October 2008 Lifebuoywith members of the GlobalPublic Private Partnership for

Handwashing (PPPHW) including UNICEF promoted

a single life-saving message:

wash hands with soap.It was conducted in 23countries.

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Th i ll d

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The campaign, calledSwasthya Chetna, or healthawakening, is the largest

rural health and hygieneeducation program everundertaken in India.

It is to educate 200 millionIndians 20% of thepopulation - to wash theirhands with soap afterdefecating and achieve thisgoal within five years.

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Products do not have such a predictable life andthe specific life cycle curves followed by differentproducts vary substantially.

Consequently, the life cycle concept is not well-suited for the forecasting of product sales.

Furthermore, critics have argued that the productlife cycle may become self-fulfilling. For example,if sales peak and then decline, managers mayconclude that the product is in the decline phaseand therefore cut the advertising budget, thusprecipitating a further decline.